If the FBI’s case against Kim Dotcom is so strong, then why hasn’t he been extradited yet? Larry Williams and Cam Slater disagreed with me on Newstalk ZB tonight when I said he had to be accused of a crime that is also a crime (carrying a similar sanction) in New Zealand.

The claimed offences pass a threshold then. Even copyright infringement carries a fine of not less than $10,000 per infringement but not more than $150,000 per piece of content infringed, and a jail sentence not exceeding five years.

But it’s not so clear that Dotcom has broken this law, here, in the US or anywhere. The 1994 Copyright Act looks to me like it was designed to catch people who actually copy a DVD or a piece of copyrighted content and then sell the copies.

Imagine a firm renting out storage units. Even if ‘Dotcom Mega-Storage’ knows that some units contain stolen goods, he might not be charged with possessing stolen goods – even if he tells them to change the locks to stop people looking, or offers them another unit if their unit is under surveillance, or gives out special offers to those who store more stolen goods with his firm. He’s not a police officer. It’s not his job to arrest the bad guys.

That’s why he hasn’t been extradited yet: No prosecutor will have an easy time showing his digital storage facility amounted to an intention on his part to rip people off, or that running such a facility would send you away for a year in Paremoremo.

It’s harder still when the evidence the FBI is relying on keeps being excluded for having been unlawfully obtained. So far, the only people who have been shown to have broken the law are our police.

Despite all the emails and skype chats gathered by the FBI, which claim to show that Dotcom and his fellow defendants were a criminal network and that their goal was always to design a site to distribute copyrighted material illegally... Despite all the FBI claims that Dotcom and others discussed ways to give cash rewards to their biggest uploaders (wow, Rewards as incentives? Arrest Fly Buys.)... Despite FBI claims they disabled internal search of files stored on Megaupload, creating a ‘cyberlocker’ site’ (where copyrighted content was hidden and available via a backdoor) the FBI are struggling to make a case stick. If they could, then they’d have one against Google, youtube, iCloud and Amazon.

“In 2007 one of the largest media companies in the world, Viacom Inc., filed a lawsuit against YouTube and its parent Google, which accused both of massive, brazen copyright infringement.

“Viacom argued that the video-sharing site, which allows users to upload, view and swap video files, was engaging in intentional illegal activity by displaying and reproducing Viacom-owned materials without having any right to the content.

“It argued, convincingly, that the defendants in the case not only knew that copyright infringement was taking place, but that the site's hosts would often engage in, promote and induce copyright violations. The corporation's lawyers even asserted that YouTube had built up an entire library of illegal materials that it used to increase traffic and advertising revenue.”

Sounds familiar doesn’t it? But Viacom lost. The judge ruled in favour of Google and YouTube:

“Judge Stanton essentially moved to distinguish the hosts that run a file-sharing site from the activity of the millions of users the site provides a haven for.”

“(The Judge said).....the onus is on the copyright holders, not the site's owners, to seek out what materials are being illegally uploaded and swapped and to move to have them taken down.”

If the FBI case is weak, that begs the question, why are the New Zealand Police continuing to pursue it? The New Zealand government better hope that Dotcom doesn’t get extradited and then win his case, because the damages owed will be in the millions. It was our police who shut down a multi-million global business. It’ll be New Zealand tax payers who pay the reparation.

I’m not defending Dotcom. He’s a convicted fraudster, a narcissist and apparently a libertarian with revolutionary fantasies.

I’m just not sure this is our fight. I doubt he’ll be leaving us in a hurry anyway. The next extradition hearing is scheduled for July.

Comments (11)

Imagine a firm renting out storage units. Even if ‘Dotcom Mega-Storage’ knows that some units contain stolen goods, he might not be charged with possessing stolen goods - even if he tells them to change the locks to stop people looking, or offers them another unit if their unit is under surveillance, or gives out special offers to those who store more stolen goods with his firm. He’s not a police officer. It’s not his job to arrest the bad guys.

Actually this metaphor is not quite right. It's not that he's hypothetically offering money to encourage more people to store stolen goods, it's that he's offering rewards for people to just - store more goods; some of which may or may not be stolen. He is not responsible for the fact that they store stolen goods in his units, even if he knows they are, and is even encouraging it. The sole purpose of Megaupload was not to share copyrighted material. There were legitimate users too. Which makes it hard to pin responsibility on Dotcom (just as it made it hard to pin criminal intent on YouTube and Google).

The New Zealand government better hope that Dotcom doesn’t get extradited and then win his case, because the damages owed will be in the millions. It was our police who shut down a multi-million global business. It’ll be New Zealand tax payers who pay the reparation.

I'm not enough of an expert on copyright law to give an opinion on the strength of the case against Dotcom, but I think this is a bit of overkill. If a judge finds there is a sufficiently strong case to justify sending Dotcom to the US, then what would be the basis for an action against the NZ police (or other authorities)?

Put it this way - imagine the owner of a storage company, in which criminals were keeping lots and lots of stolen things, got arrested and tried for being a party to criminal offending. She/he is acquited by the jury. Can that storage company sue the police for the harm done to her/his business by the charges being brought?

imagine the owner of a storage company, in which criminals were keeping lots and lots of stolen things, got arrested and tried for being a party to criminal offending. She/he is acquited by the jury. Can that storage company sue the police for the harm done to her/his business by the charges being brought?

Imagine the police, when arresting that person had bulldozed their storage sheds with contents in place, nearby offices and generally razed the facilities to the ground and the answer becomes clearer.

Dotcom might try and fail for exemplary damages but I think he'd have a strong case for reparations.

Josie, we put some of those exact points to Dotcom in Paul Holmes' interview with him back in 2012. Check out the transcript here for Dotcom's take on the copyright questions you raise.

As for claims for reparation, Dotcom has got himself in a tangle and hasn't been really challenged on it yet. In that interview he said:

HOLMES Then there's the spying, the GCSB, the spying. A former prime minister, Sir Geoffrey Palmer, says the New Zealand Government could be liable for heavy damages for the illegal spying on your activities as a New Zealand resident. Should there be heavy damages?

DOTCOM Well, I'm not interested in damages from the New Zealand Government. I'm interested to resolve this case. I'm interested for people to realise the people who attacked me, they made a mistake and that this needs to be resolved in a diplomatic fashion, and soon, because this is just going to drag on. It's going to hurt everybody. It's going to embarrass those who are attacking us. And there's no point in taking this further.

HOLMES If you got damages, of course, I suppose that could go some way to paying for a new broadband cable across the Pacific.

DOTCOM Yeah, but if I would seek damages, I would not seek them in New Zealand. I would seek them from the US Government, which has acted in bad faith, and I would seek that also from Hollywood Studios who are paying the MPAA and Chris Dodd, you know, to do this kind of thing. And I think they are liable because there has been a lot of bad faith and a lot of misinformation going on in this case.

Yet having promised not to seek damages from or in NZ, last September he reportedly DID file a damages claim that NZ taxpayers would have to pay for. See this Herald article.

Imagine the police, when arresting that person had bulldozed their storage sheds with contents in place, nearby offices and generally razed the facilities to the ground and the answer becomes clearer.

But the NZ Police didn't do any of these things - the US authorities did. See here:

MegaUpload founder Kim Dotcom told his Twitter followers today that hosting company LeaseWeb had wiped MegaUpload user data from more than 600 servers without warning. According to Dotcom, LeaseWeb wiped all MegaUpload servers without warning and all user data as well as "crucial evidence" for MegaUpload's defense has been destroyed.

"Millions of personal #Megaupload files, petabytes of pictures, backups, personal & business property forever destroyed by #Leaseweb," he tweeted, later adding, "This is the largest data massacre in the history of the Internet caused by the U.S. government, the Department of Justice & #Leaseweb."

I'm not going to defend how the raid on Dotcom's mansion was carried out (the AOS? Helicopters? Really?), and the fact that the search warrants authorising the seizure of his stuff were too vague to be lawful was just dumb. So he may have grounds for some damages over how the cops did their job there. But that raid didn't destory Megaupload, because all the data wasn't sitting in little boxes under Dotcom's bed!

There are some separate issues here too. Josie mentions KDC's fraud conviction. If this were significant it ought to have jeopardised his attempt to immigrate. If not, it shouldn't prejudice the current matter.

as for a fraudster, a narcissist and apparently a libertarian with revolutionary fantasies... What you are saying is that, on the whole he is saner, nicer, and more trustworthy than the average MP.

But the NZ Police didn't do any of these things - the US authorities did.

I'm not going to defend how the raid on Dotcom's mansion was carried out (the AOS? Helicopters? Really?), and the fact that the search warrants authorising the seizure of his stuff were too vague to be lawful was just dumb. So he may have grounds for some damages over how the cops did their job there.

So you do agree he may have a claim for reparations. I make no claim to knowing how much but the more I think about it the more I suspect he ought have a go for exemplary damages - every time I return to thinking about the childish behaviour of our police in their naive eagerness to throw NZ law out to please U.S claims the more I wish they would be punished.

Whether or not he is legally liable to extradition, his celebrity status on the left, and the association of people like Bomber Bradbury with him is crazy. Why would any intelligent and self-respecting left wing activist join a political venture with this obese poser, with his net worth of $200million gained from dubious sources, his outrageously ostentatious lifestyle including palatial property complete with pet giraffes, the pink Cadillacs, Lamborghinis etc and for when he's really in a hurry the helicopter (which is also handy when he blows half a million on a fireworks display), and his convictions back home for 11 counts of computer fraud, 10 counts of data espionage, insider trading and embezzlement among other offences, and whose first political action in this country was to donate $50,000 to John Banks???